Non-QM products are seeing a huge comeback. After a number of companies paused their non-QM lending during the darkest days of COVID shutdowns, non-QM lending has returned bigger and better than ever.
Non-QM products are seeing a huge comeback. After a number of companies paused their non-QM lending during the darkest days of COVID shutdowns, non-QM lending has returned bigger and better than ever.
And, as Senior Mortgage Reporter Bill Conroy notes in his latest article, the potential for non-QM over the next year is sky-high since "a huge slice of the borrowers in this non-QM category represent the heartbeat of the U.S. economy."
Keith Lind, executive chairman and president of Acra Lending, put it this way: "Think about all the mortgage brokers [this year] that didn't care about non-QM and are focusing on agency and jumbo products because it is the low-hanging fruit. Well, guess what? If rates go up a little bit, they will have to find new products to focus on."
Tailwinds for non-QM include the growing number of self-employed entrepreneurs and gig workers who don't fit neatly into the QM box, as well as borrowers facing credit challenges.
Manish Valecha, head of client solutions at Angel Oak Capital, said that in a normalized environment, the percentage of non-QM loans in the market is about 10% to 12%. "That implies a market size [today] somewhere between $175 billion to maybe $200 billion," Valecha said. "We just see tremendous opportunity."
Read the whole article here, and enjoy your weekend!
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